“A lot of this is tied to falling commodity prices.”
That’s how USDA Chief Economist Seth Meyer explains why USDA is projecting a record trade deficit next year. It’s not just sharply declining commodity prices. Other factors include, “a slower Chinese economy, continued strength of the U.S. dollar, China diversifying its sources for trade, perhaps a little bit weaker on export competitiveness for ourselves.”
All this is leading to a bigger trade deficit despite rising exports.
“$4 billion to $169 billion for exports, an increase of $8 billion on imports, to a total of $212 billion for fiscal year ’25, which means a rising trade deficit of $42.5 billion forecast for fiscal year ’25.”
This USDA forecast comes amid declining economic conditions in farm country, compounded by the lack of a farm bill.
It also follows an intense policy debate over the value of free trade deals that the administration’s moved away from, but both parties’ lawmakers argue are a must to open export markets.
Source: NAFB News Service
